Rural mobile competition under the spotlight

If you live in a major metropolitan area, you will be able to choose from around 30 different mobile phone carriers, the vast majority of which piggyback on the networks of the big telcos to provide their service. If you live in a regional or remote area of Australia, you’re not so lucky. However, that could be about to change.

The Australian Competition and Consumer Commission (ACCC) is considering whether or not to declare a wholesale domestic mobile roaming service that would allow smaller providers to expand outside of the big cities and increase competition in rural areas. The big telcos would have to make their networks available in regional areas, as well as urban areas, where they already lease their networks to smaller service providers.

What does this mean for me?

Access to a roaming service would enable mobile carriers to provide coverage for their customers in areas where they don’t have their own network. In many cases, Telstra, Optus or Vodafone will be the only options for many consumers in rural areas. In fact, there are some areas of the country only covered by Telstra.

“Consumers are increasingly relying on mobile services and the issue of coverage and a lack of choice in some regional areas is a particular issue that has been raised by a number of groups,” ACCC Chairman Rod Sims said.

“There has been significant interest in the questions around access to mobile networks and mobile roaming, including from representatives from regional Australia, the Regional Telecommunications Review Committee, Infrastructure Australia and the House of Representatives Agriculture Committee.”

The ACCC says a declaration inquiry would focus on a number of key issues, including:

  • how consumer demands for mobile services are evolving, and whether there are differences in regional areas to urban areas
  • the likely investment plans of each of the mobile network operators to extend coverage and upgrade technology, absent a declaration
  • whether there are any significant barriers to expanding the reach of mobile networks
  • any lessons from similar experience with domestic mobile roaming in other countries.

The ACCC has previously considered mobile roaming in regional areas in inquiries held in 1998 and 2005 respectively. On both occasions, it decided not to regulate an access service as it was satisfied roaming agreements were being commercially negotiated.

“Network coverage is clearly a key feature of a mobile service, and each of the mobile network operators has extended its networks since we last looked at this issue in detail,” Mr Sims said.

“A lot has changed since 2005. We do think it’s time we look at the issue again in detail, and examine some of these key matters, including consumer demand, network investment, and barriers to competition. We consider the most efficient way to do that is to consider all of the issues carefully through a declaration inquiry.”

Mr Sims stressed that, at this stage, the ACCC had not formed any views on whether declaration of a mobile roaming service would deliver benefits for consumers.

“A particular area of concern for us is whether consumers would, in fact, be disadvantaged if the incentives to invest in expanding the reach of mobile networks were reduced,” Mr Sims said.

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